Hi, I had bought a franchise a couple of years back and when I made the payments to acquire the franchise I did not have a service tax number with me. I did not render any services after that and over the next few months or so got a service tax number. I had carried forward the input credit into GST but just recently was called for a discussion with the GST team and they refuse to acknowledge this credit because of the fact that the service tax was not registered. I tried to explain to the officer that no business was conducted and it was an unintentional mistake and there is aadhar, pan, bank account to prove that it was me who transacted and can't they find a way to provide an exception. The best they did was asking me to come back with any prior precedence to something like this (where a service tax registration happened after an agreement was made )and if so are willing to look into it..There is a lot of money and I wouldn't want that to lose the input credit. Your help is appreciated
Hi,
- Does the invoices for payment of franchisee fees containing your service tax no.?
- When you made payment for franchisee fees, date of agreement of franchisee and date of obtaining service tax number?
- Also have you showed the ITC amount in the service tax return of the last quarter i.e. April 17 to June 17 of the previous tax regime.
- You can share the details at aroravivek1982@gmail
- I may ask for further information and then only share the case laws with you.
Thanks
Dear Sir,
Hope you are doing well !!
As per my understanding, the officer is correct.
You can not claim the ITC.
However, i am not able to understand the below line -
(where a service tax registration happened after an agreement was made )
Here is the chronology of events: Mar 2017 (Master Franchise), May 2017 (Unit Franchise), June 2017 Service Tax Registration Given this, is there any way I can get an exception or site any precedence of registration happening after having made an agreement/invoice for a business and claiming credit.. This was a genuine miss..
I dont think you will get the ITC since the person to whom you would have paid service tax would not have mentioned your service tax number in his return.
So if you can ask your supplier to change his return or something like that then may be you can claim such credit.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Whether you have claimed the concerned credit in your return after taking registration and also complied with the procedural requirement of invoices on which the service tax has been paid and registration numbers of the service providers all have complied?
You must have complied with the above procedures in order to be eligible for credit.
However, here are a few cases related to this matter,
C. Metric Solution (P.) Ltd. Vs Commissioner of Central Excise (CESTAT Ahmedabad)
J.R. Herbal Care India Ltd. v. CCE 2010 (253) E.L.T. 321 (Tri.-Delhi)
mPortal India Wireless Solutions (P) Ltd. Vs CST -2011 (9) TMI 450 - Karnataka High Court
Commissioner of Service Tax Chennai Vs Verizon Data Services India P. Ltd. 2013(12) TMI 741 CESTAT Chennai
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
In the given facts you can not claim credit of March,2017 franchise fees but can claim credit of May,2017 franchise fees.
Will need to do some research on it.
Will get back to you after some research
It is well settled principle that ignorance of law is not excused and cannot be a ground to avoid tax liability.
In the above scenario, you will not be able to claim the ITC.
Hello Sir,
In the above scenario, you can not claim the credit.
